Why Do I Need Earnest Money?
When you make an offer on a home, part of that offer can include a little show of good faith on your part, in the form of cold, hard cash. Generally, one to three percent of the offer price is pretty normal for an earnest money deposit, but this can vary pretty widely based on market conditions. And the more you put up, the better.
But what happens to that money?
It will simply be applied in full as a credit in your closing documents, reducing the amount of money you need to bring with you on the big day.